Venezuela Increases Proven Oil Reserves by 30%

By Gregory Wilpert - Venezuelanalysis.com

May 9, 2008 (venezuelanalysis.com)— Venezuela’s Minister of Energy and Petroleum, Rafael Ramirez, announced yesterday that the country’s proven oil reserves have been increased to 130 billion barrels, a 30% increase over previous official figures.

Ramirez made the announcement at the start of the first meeting of the South American Energy Council, which is a subgroup of the Union of South American Nations (UNASUR), in which all energy ministers of South America participate.

Ramirez also said that with the most recent certification of crude oil reserves, which was conducted by the Chinese company CNPC, Venezuela is on track for its goal of certifying a total of 235 billion barrels in proven reserves in the Orinoco Oil Belt alone by the end of 2009. This is in addition to Venezuela’s 71 billion barrels of conventional crude.

With the most recent addition of 30 billion barrels, Venezuela now has the fourth largest petroleum reserves in the world, following those of Saudi Arabia (260 billion barrels), Canada (179 billion), and Iraq (136 billion).

The newly certified oil reserves are all located in Venezuela’s Orinoco Oil Belt, which holds almost exclusively extra-heavy crude, a tar-like substance that is fairly expensive to extract. The high oil price has made its extraction extremely profitable in the past few years.

Also, unlike most of Canada’s reserves of tar sands, which are strip-mined, the Venezuelan extra-heavy reserves are liquid enough to be pumped out of the ground.

Venezuelan Oil Reaches New Highs

The Venezuelan oil basket reached a historic high on Friday, when it traded for $107.60 per barrel. Oil analysts attributed the over $4 jump compared to the previous day to the release of a Wall Street Journal article that claimed that new documents released by the Colombian government showed close ties between the Venezuelan government and Colombia’s rebel group, the Revolutionary Armed Forces of Colombia (FARC).

The article touched off speculation that new documentary proof of close ties could mean that the Bush administration would impose sanctions on Venezuela, which would cause the Chavez government to stop oil shipments to the U.S.

Ten days ago, however, the U.S. state department declined to classify Venezuela as a “state sponsor of terrorism,” when it issued its annual report on terrorism, despite pressure from Republican lawmakers that it do so.

Venezuela has repeatedly been accused of ties with the FARC, which President Chavez has consistently denied. These accusations received new momentum with the release of emails and other documents that were supposedly found in a FARC camp that the Colombian military attacked in Ecuador last March. The authenticity of the documents has been questioned by both the governments of Venezuela and Ecuador. Interpol is currently evaluating the documents, which is to release its report next week.

Adam Isaacson, of the Center for International Policy’s Colombia Program, has stated in his blog Plan Colombia and Beyond (www.cipcol.org) that even if the FARC documents prove to be authentic, they do not prove that Venezuela has provided material support to the FARC.